Search

04 December 2019

Project finance - introduction

Category: MASTER COURSE

An overall view of the concepts and approach used in structuring and arranging project finance transactions for major infrastructure schemes in the UK and overseas.

Who should attend?
This course will be of benefit to those working within, or intending to move into, project development or project finance areas. Previous participants have included engineers, bankers, accountants, lawyers and middle/senior managers in utility companies, commercial banks, consultancy and law firms.

What you will gain

  • An overview of the concepts and approach used in structuring and arranging project finance transactions for major infrastructure schemes in the UK and overseas
  • An understanding of risk analysis and risk management technique
  • A project appraisal methodology
  • An understanding of the language and approach of financiers
  • Insight into the drivers, approaches and concerns of the key players involved in creating and financing major projects
  • A focus on finance and the tools to value a project

Programme outline

Introduction and overview of project finance

  • Definition of project finance
  • Project finance as opposed to financing of a project
  • Limited-recourse and non-recourse finance
  • Main features of project finance
  • Parties involved - interests and roles
  • Importance of cash flow
  • Documentation - what are the aims?
  • Project development process
  • Why choose project finance

Project finance market

  • Origin and evolution of project finance
  • Project finance figures: Europe, Americas, Asia and Pacific, Africa and Middle East; oil and gas, power, infrastructure, mining, telecom

The main parties in a project finance

  • Parties involved - interests and roles
  • Project company/borrower
  • Sponsors/shareholders
  • Banks
  • Multilateral and export credit agencies
  • Insurers
  • Construction companies
  • Operator
  • Host government

Risks and mitigants

  • Understanding the risk allocation
  • Country and political risks
  • Industry risks
  • Project risks
  • Environment risks
  • Construction risks
  • Offtake - sales and supply risks
  • Contractor risks
  • Operator risks
  • Funding risks
  • Foreign exchange - currency and Interest rate risks

Credit analysis by the lenders

  • How do lenders assess projects
  • Assessing credit worthiness
  • Getting started with credit
  • Business/commercial risk
  • Risk evaluation framework - developing a methodology
  • Macro – country - political
  • Industry products / market suppliers / contracted purchases
  • Project production facilities/infrastructure / technical/contractors
  • Management – project’s sponsors

The financial statements

  • Balance sheet and leverage
  • Income statement and cash flow
  • Ratios ratings

Advanced cash flow analysis

  • Net operating cash flow
  • Free cash flow
  • Discounted cash flow

Structuring a project finance

  • Cash flow analysis
  • What do we want from a model?
  • Repayment profiles and coverage ratios
  • Key management concerns with models
  • Key project finance ratios: sponsors' perspective
  • Investors - gearing benefits
  • IRR –the internal rate of return
  • NPV –the net present value
  • Key project finance ratios: lenders' perspective
  • CADS–cash flow available for debt service
  • DSCR– debt service cover ratios
  • PLCR – LLCR – project and loan life cover ratios

Financial projections

  • Why are the financial models used?
  • Volatility
  • What is the project and why should it take place?
  • What are the key operating assumptions?
  • The financial modelling assumptions: construction cost, operation: revenues, expenses, taxes, financing: debt / equity
  • Cash flow : CADS – DSCR / NPV - IRR
  • The projection cases
  • Appropriate debt and equity financing

The documentation

  • Shareholder / sponsor arrangements
  • Project documents
  • Legal and structuring issues
  • Seniority, senior debt, junior debt , equity 
  • Cash flow waterfall
  • Guarantees / securities / covenants
  • Loan documentation

No prior knowledge of project finance or finance is assumed.

The course starts at 9.00am on each day.  Lunch and refreshments are included, but not accommodation.
18 CPD hours (where applicable)

CIMA work in partnership with BPP Professional Education to offer CPD training courses

Booking Information

Date Location Price
4 December 2019 - 09:00 London - three day course Price: GBP 1,910.00
Member price: £1,719. Plus VAT on all prices. Excluding accommodation.

Project finance - introduction

CIMA members and students should log in to MY CIMA before booking to receive the appropriate discount.

Book Now

In-house training 
We can develop tailored training programmes to enhance the finance and business skills of staff across your organisation. To discuss how we can meet your learning and development needs please email us.

Find out more 
If you have any queries please email cima@bpp.com or phone us on: +44 (0)3300 603400.

The venue for this course will be confirmed 14 days before the scheduled date. 

CIMA work in partnership with BPP Professional Education to offer CPD training courses.  

This course will be delivered by BPP Professional Education Limited (“BPP”).  Accordingly, when you sign up for this course, CIMA will pass on the contact details you have provided to BPP so that they can contact you to complete your booking and process payment.  BPP will process any personal information it collects about you in accordance with its privacy policy, which is available at: http://www.bpp.com/professional-education/privacy

The information provided to BPP will not be used by BPP for marketing purposes.

CIMA on demand 

Our catalogue of online CPD training courses designed to fit around your schedule.

Get any 5 courses for just £99 +VAT - limited time only.  

Find out more